Body Corporate 68792 v Memelink
[2016] NZHC 256
•24 February 2016
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
CIV 2015-485-202 [2016] NZHC 256
IN THE MATTER of section 141 of the Unit Titles Act 2010 IN THE MATTER
of an originating application to appoint an administrator
BETWEEN
BODY CORPORATE 68792
First ApplicantAND
SYNERGY ENTERPRISES LIMITED, JAMES AND CAROLINE MCKERNAN, STEVEN AND VALDA SCHECKTER AND GEOFFREY ARDEN
Second Applicants
AND
HARRY MEMELINK AND
IAN TREVOR NEILL HAMILTON First Respondents
AND
ANTHONY HARRY DE VRIES AND GERALDINE DE VRIES
Second Respondents
AND
CUDBY & MEADE LIMITED Third Respondent
Hearing: 23 February 2016 Counsel:
J K Mahuta-Coyle for Second Applicant
J L Greenwood (Administrator of First Applicant) H Memelink In Person
No Appearance for Third Respondent
Judgment:
24 February 2016
JUDGMENT OF BROWN J
BODY CORPORATE 68792 & ORS v MEMELINK & ORS [2016] NZHC 256 [24 February 2016]
The amended application
[1] The original application dated 25 November 2015 concerned four matters in respect of which orders and directions were sought.
[2] The first matter, which concerned insurance proceeds received by the Body Corporate from its insurer in respect of damage to Unit 15, was addressed in my Minute of 18 December 2015.
[3] The fourth matter, which concerns enforcement against the third respondent of an agreement to settle certain litigation, is to be dealt with in the District Court where a fixture to determine an application for entry of judgment has been made for
7 March 2016. The Administrator considers that that matter is best dealt with in the
District Court at this stage.
[4] The remaining two issues were the subject of an amended application dated
17 February 2016 in which orders and directions were sought as follows:
(a) Confirming that the Administrator’s decision to remove unlicensed, unregistered and derelict motor vehicles, timber, packaging materials, broken and dilapidated furniture and such other items as may be on the common property, or on a unit designated for vehicle parking, is a proper exercise of the Administrator’s powers and duties.
(b)Confirming that the Administrator’s decision to undertake a repair to Unit 16 in a good and tradesmanlike manner and that his decision to do so is a valid and proper exercise of his powers and duties.
[5] Although Mr Memelink appeared and made submissions, there was no representation of the third respondent as directed in para [9] of my Minute of
3 February 2016.
The issue concerning removal of vehicles
[6] The presence of various vehicles at the premises of the Body Corporate has been a matter of concern to the Administrator for a considerable period of time. In his first report as interim Administrator dated 21 April 2015 Mr Greenwood stated:
19.1Harry has a number of abandoned vehicles situated within his carpark areas and obsolete machinery on the front lawn in front of Unit 15. I have requested Harry to remove those items but there is resistance. This matter remains at large.
[7] The issue was then addressed again in the interim Administrator’s second
report of 26 May 2015 in the following terms:
23Harry acknowledged that his vehicles are permanently parked. He stated that he was awaiting warrants of fitness for the vehicles and in due course he would likely have the vehicles sold and removed. The Operational Rules provide for permanent parked vehicles to be removed. Harry will be put on notice to remove his vehicles once the Operational Rules are registered.
[8] The grounds for the first direction sought in the amended application state:
4.1The First and Third Respondents have refused to comply with directions from the Administrator to remove derelict motor vehicles, stored timber and a variety of unsightly items.
4.2The presence of these items detracts from the amenities of the premises, detract from the use and enjoyment of the development by other unit holders and are detrimental to the interests of all unit owners.
4.3Directions were given by the Administrator to remove such items on diverse dates, which the First and Third Respondents have declined to meet.
[9] Evidence in support of the Administrator’s proposed course of action was provided in the affidavit of J A McKernan dated 23 November 2015. Annexed to his affidavit were photographs which he stated showed two derelict trucks, which were said to be unregistered and unwarranted, in the driveway area, three more derelict vehicles that it was said had been on the site for some years and a trailer full of what was described as junk.
[10] Mr Memelink took issue with that evidence in an affidavit dated
26 January 2016 in which he contended that:
(a) the alleged unlicensed and unregistered vehicles were either actually registered or on exemption;
(b)the stored timber was working timber. The only working timber on site was part of the standard business operation of the third respondent and was kept orderly;
(c) various alleged unsightly items had been removed and a trailer, on which timber had been stored, was being re-certified and re-registered so that it could be put back in its rightful parking space.
[11] The Administrator’s position was reflected in the following paragraphs of his affidavit of 17 February 2016:
6.I intend to have agents enter the site to remove the derelict motor vehicles. I have, in my affidavit previously, referred the Court to the Operational Rules (see paragraph 12 of my affidavit of
25 November 2015). I seek a direction to uphold my decision that the stored derelict (and unsightly) vehicles may not be kept at the
property, as Mr Memelink would have otherwise.
…
8.The issue of Mr Memelink’s use of the exterior of the units and common property to store material in the manner he has done has caused problems since at least 2007. Indeed, it was Mr Memelink’s conduct that caused Mr de Vries to sue the Body Corporate in the Tenancy Tribunal, seeking damages that he said his business suffered as a result of the Body Corporate’s failure to control Mr Memelink and to remove unsightly items from the front of Units 14 and 15.
9.As noted in my statement to the Court at the last hearing, the Respondents continue to threaten and bully. Most recently, they have adopted anarchical approach, which serves to undermine the administration. They also assume that I can, or should, rule on the special levy issues and other disputed matters, which are properly matters for the Tribunal or the Courts for them to pursue if they believe they have remedies for what they claim to be perceived wrongs. The haphazard nature of many accusations made through dozens of emails and public releases only serve to exacerbate the confusion and anger which exists and leads to escalating costs and emotional harm for owners, which needs to stop.
10.I have attempted to procure compliance in the past and I am satisfied that this will only be achieved by the forcible action. I know of no reason why Mr Memelink might not simply remove the derelict vehicles to other property that he owns; he has not put any valid reason to me. As stated above, Mr Memelink just asserts that he is, in fact, in authority despite my appointment. I intend seeking assistance to carry out the steps I have described, including from the New Zealand Police if necessary.
[12] This first direction sought in the amended application was also the subject of an affidavit of S Scheckter dated 16 February 2016, one of the second applicants, an owner of Unit 8 and a former member of the management committee of the Body Corporate. He uses Unit 8 as a storage facility for his Petone business. He deposed that the situation at the unit development is so bad that he spends as little time at the property as he possibly can. He supports the Administrator’s proposed course of action.
[13] At the hearing Mr Memelink reiterated his stance that he was entitled to have certain vehicles parked at the site on the property of the third respondent. He also traversed again the complaints previously made about abuses of the Body Corporate processes and his claim that he is the rightful chairman of the Body Corporate.
The repair to Unit 16
[14] The circumstances relating to the second direction sought were explained in the amended application as follows:
5.On or about 18 February 2014 a vehicle caused damage to a wall of Unit 16 of Body Corporate 68792. Subsequently, a claim was made on behalf of the Body Corporate to Vero Insurance, the underwriter of Duncan Partition Installations Systems who was the owner of the vehicle that damaged the building. Damage to the building was not notified to the Body Corporate, in breach of the Third Respondent’s obligation to do so. The Third Respondent has failed to repair the building in a workmanlike manner.
[15] The original evidence concerning the fact of the unrepaired wall was contained in the affidavit of Mr McKernan of 23 November 2015.
[16] In his affidavit of 26 January 2016 Mr Memelink stated that the repair work had commenced but that he was not able to obtain the matching panel required, as “this is part of the Harding’s Group” which is apparently connected with certain leaky building problems.
[17] In his second affidavit of 1 February 2016 Mr McKernan described the repair carried out as at best “a patch”. In his view the repair, a photograph of which was annexed to his affidavit, was very poor quality workmanship and the panel that had been damaged had not in fact been replaced.
[18] In his affidavit of 17 February 2016 Mr Greenwood stated:
7.As the email correspondence from Mr Memelink and Mr de Vries make clear, contractors that I have sent to the site to effect repairs and attend to maintenance were sent away by them. I intend to retain a contractor to properly repair the wall to Unit 16. I believe that a direction that I may do so in the exercise of my powers will assist in the same manner.
[19] At the hearing Mr Memelink took issue with Mr McKernan’s description of the quality of the repair and invited the Court to instruct an independent contractor to inspect the work. While it is not the role of the Court on an application for directions to direct that such a course be adopted, Mr Greenwood advised the Court that he would proceed to have the current state of repair inspected by an independent contractor.
Decision
[20] An administrator may be appointed under the Unit Titles Act 2010 by the High Court, in its discretion on cause shown, for an indefinite period or for a fixed period and on such terms and conditions as to remuneration or otherwise as the Court thinks fit.1 The High Court may in its discretion on the application of the administrator or any other person referred to in s 141(1) remove or replace an
administrator.
1 Unit Titles Act 2010, s 141(3).
[21] I accept Mr Mahuta-Coyle’s submission that the inherent jurisdiction of the Court enables directions to be given to administrators appointed under the Unit Titles Act similar to that in respect of other officers which the Court appoints: Re Falconer2; Cassin v Richardson.3
[22] In my Judgment (No 5) dated 28 July 20154 I recorded my clear view that the degree of dysfunctionality within BC 68792 and the polarisation of the positions of the two sides was such that an order under s 141 was not only warranted but essential. In making the order appointing Mr Greenwood I reserved leave to him to apply to the Court for any directions which he considered were necessary or appropriate.
[23] I have already noted the current state of affairs as advised by Mr Greenwood in para 9 of his affidavit of 17 February 2016.5 I also note the following evidence earlier in that affidavit:
5.As the Court is aware, there are persistent and everlasting threats of litigation and various types of retribution, along with allegations of misconduct that are now extended to me. I annex emails from Mr Memelink and Mr de Vries dated 8 January 2016 … and more recent emails from Mr Memelink dated 2 February 2016 and
13 February 2016 … which illustrate the attitude they have towards me in the performance of my role. Mr Memelink appears to have
reached a view that because he thinks he was validly elected as a
chairman in a prior meeting in October of 2014, he is entitled to overrule directions I give, and both he and Mr de Vries have sent contractors away from the premises who I have instructed to undertake work.
[24] The emails to which he referred, one of which was signed off by Mr Memelink as the “Rightful Chairman of Body Corp 68792” made various allegations against Mr Greenwood including his having “failed in every way and actually helped further fraud and perjury to be committed” and his having “opened
yourself up for a liability as you are bias and one-sided”.
2 Re Falconer [1981] 1 NZLR 266 (HC) at 272.
3 Cassin v Richardson [2006] NZFLR 1068 (CA) at 38-42. Similarly Re Securitibank Ltd (in liq)
[1978] 1 NZLR 97 (HC) at 105-107.
4 Body Corporate 68792 & Ors v Memelink & Ors [2015] NZHC 1731.
5 At [11] above.
[25] In this difficult environment and faced with such allegations, in anticipation of the steps which Mr Greenwood considers it is now necessary to take as Administrator, I consider that Mr Greenwood is entirely justified in wishing to obtain a direction from the Court to the effect that the course of action contemplated is a proper exercise of his powers and duties.
[26] Consequently I make the first direction in the amended application.6
[27] Subject to Mr Greenwood first obtaining a report from an independent contractor, as he has indicated he intends to do, and satisfying himself that the repair is warranted, I also make the second direction in the amended application but reworded as follows:
A direction confirming that the Administrator’s decision to undertake a repair to Unit 16 in a good and tradesmanlike manner is a proper exercise of his powers and duties.
[28] The amended application seeks an order that the first, second and third respondents meet the costs of and incidental to this application. However I would wish to receive further submissions on the issue of the respondents’ liability for costs in circumstances where the nature of the orders sought were directions for the assistance of the Administrator. Consequently costs are reserved on the amended application. I reserve leave to Mr Mahuta-Coyle to file a memorandum as to costs in due course if he considers it appropriate. In the event that he files a memorandum,
then Mr Memelink is entitled to file a memorandum in reply on the issue of costs.
Brown J
6 At [4](a) above.